Car dealer plans expansion in Orrville, seeks abatement

By PAUL LOCHERStaff WriterPublished: March 21, 2013 4:00AM

ORRVILLE -- City Council heard on first reading Monday a resolution authorizing the Safety-Service director to contract to provide tax abatement for real property for Pericles Holdings and SD Orrville.

Pericles Holdings and SD Orrville are Serpentini Automotive, which is planning to build a $3.1 million auto sales and service complex on four acres along North Main Street, just south of the new Goodwill store and next to the city's power plant.

Serpentini is asking for a 50 percent tax exemption for 10 years, which, according to Safety-Service Director Steve Wheeler, would save the company about $40,500 annually on taxes.

Under the proposed agreement, Serpentini's would create at least six new jobs at the automotive facility, with 30 percent of those being local residents. In addition, the agreement calls for the company to encourage its employees to reside in the city.

After the resolution was read, Mayor Dave Handwerk thanked company owner Bob Serpentini, who was in attendance, for his ongoing interest in Orrville and keeping his company in the city. Handwerk told Serpentini he knew the longtime business could have moved anywhere, and was pleased he had decided to reinvest in Orrville. Handwerk also commended the company's participation in supporting the city's schools and other elements of the community.

In other action, council voted unanimously to adopt a resolution permanently closing the Schrock Road Norfolk Southern Railway Co. grade crossing. The railroad had long sought the closure, citing its hazardous short sight lines.

Wheeler said the city will begin barricading off access to the crossing along Back Orrville Road, initially with concrete obstacles, and eventually by planting trees and relandscaping the area. Norfolk Southern and the Ohio Rail Development Commission will contribute $20,000 toward the closing.

In addition, the city will reconfigure the intersection of Crown Hill Road and Back Orrville Road to create an easier turning radius for big trucks traveling to and from the Scotts Co.

Wheeler said roadwork at the site will be under way as soon as the weather is permissible.

Council heard on second reading a resolution to make appropriations for the expenses of the city for this year. A public appropriations workshop was presented before the council meeting by finance director Janet Strimlan. The annual workshop enables council to review appropriations line by line and be able to ask questions.

At the workshop, Strimlan noted in 2012 the city achieved its highest-ever income tax collection, and contractors working on the various construction projects the city has going contributed an estimated $180,000 to the city's bottom line through local purchasing.

"At some point this (revenue) will go away," Strimlan cautioned.

A philosophical debate on the future of the city's finances was initiated by at large council member Paul Vance, who talked about projections that show the city's finances dipping sharply by 2017.

"What is our approach?" Vance asked. "Are we going to wait until that time, or enter into a glide path down to that new level?"

Vance said he believes the city needs to make a decision on whether to take a proactive long-term approach by beginning to reduce expenditures by 3 percent or 4 percent annually over the next few years to stave off projected deficits, or to "take a year-by-year approach and see if revenues come in higher" than projected. He said he believes the best path is to "make reductions now."

Utilities director Jeff Brediger said new Environmental Protection Agency rulings have the potential to impact the city's power plant to the tune of between $10 million and $40 million.

"It's a little premature to tell -- there's so much up in the air at this stage," said Brediger. But he assured council there is "a clock ticking" on implementing clean air directives and the Utilities Department is trying "to hone in on what that picture is going to look like."

He said what is for certain is the power plant is definitely "going to be more vulnerable going forward," and "customers will pay the freight" on meeting the new regulations, and as a result "will have less disposable income" as "utilities take on more debt."

Currently the city's electric utility is only weeks from being debt-free for the first time in years.

Strimlan told council the city has maximum borrowing power of about $9 million, above which it cannot afford the debt service.

Under new business, council voted unanimously to adopt two ordinances, both providing for the issuance and sale of bonds -- one for $2 million and the other for just more than $1 million -- to refund at a lower interest cost some of the city's outstanding water system revenue bonds from 2002.

Strimlan said the bond refunding would save the city $173,000 on interest, while additionally lowering other of the city's payments and rates. Council members called the refunding legislation a "no-brainer" and a "multiple win-win-win" for the city, with very nominal risk.

Council voted to go into executive session to discuss personnel matters, and adjourned without transacting further public business.

Reporter Paul Locher can be reached at 330-682-2055 or plocher@the-daily-record.com.

Want to leave your comments?

I think that you mean that the citizens of Orrville will need to invest in the upgrades that the EPA is trying to force the power plant to make. Upgrades that will cost the citizens anywhere from $20 million to $40 million to come into compliance.

paulvance

March 21, 2013 7:15AM

Closing the power plant is not a certainty. The plant may still invest in the required pollution control equipment.

bam

March 21, 2013 5:04AM

I wonder at what point the power plant will be forced to close due to EPA regulations?